There’s a wealth of student loan advice on the internet, so picking which recommendations to follow might be difficult.
Several proven methods can help you pay off your student debt, no matter what your circumstances are.
In this post, we’ll cover 12 student loan advice that will help you pay your debts as a student quickly.
- 1. Knowing your loan terms is the first step
- 2. Don't borrow more than you need
- 3. Pay your higher student loan in priority
- 4. Sign up for automatic payments to avoid defaulting
- 5. Locate and contact your loan servicer
- Download The Loan Comparison Calculator
- 6. Don’t default on your student loan in any way possible
- 7. Consider if it's possible to pay off your debt while you're in school
- 8. Leverage your repayment options if you’re facing difficulties
- 9. Seek opportunities to get student loan forgiveness
- 10. Make debt repayment your primary goal rather than the amount you owe
- 11. Refinancing your student loans is a smart option
- 12. If you are caught up, consolidating your loans might be an excellent solution
- Frequently Asked Questions
1. Knowing your loan terms is the first step
Getting organized is one of the first steps to take as a student or recent graduate facing student loan payments.
Because your credit score will have an impact on so many aspects of your life, it’s critical to keep track of the ins and outs of your student debts.
“The most crucial thing is to comprehend the entire cost of a loan.”
Said Sabrina, co-founder of Edmit.
Understanding the following 5 points about your student loans is crucial to understanding what you need to do:
- How much you’ve borrowed or intend to borrow is determined by your particular situation.
- How your interest rate, which may be fixed or variable, and how it will impact your borrowing costs
- When you need to pay off your loan, the date it’s due, and if you’ll be charged an upfront fee are all things to consider.
- The first payment deadline as well as whether you have a grace period.
- How long will your loan term last?
The interest payments are crucial because, while they are a component of the loan over which you have little influence, such as by refinancing or paying off your debt early, they are the portion of the loan that you can change.
What you pay in interest may encourage you to make additional payments overtime to save money.
2. Don’t borrow more than you need
Be wary of how much you borrow if you haven’t taken out student loans yet.
Many Americans who owe student loans (about $1.61 trillion) would love to go back in time and take out less debt.
Keep in mind: you are not required to accept the entire sum of student loans offered in your financial aid award letter.
Instead, figure out how much your cost of attendance will be and whether you can offset them with a part-time job or other side business.
You’ll be out of debt sooner if you keep borrowing to a bare minimum.
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3. Pay your higher student loan in priority
Because of the high-interest rates on these loans, it’s usually a good idea to pay them off first.
Another approach is to budget a particular amount over and above the total monthly required payments, then allocate the rest to the debt with the highest rate of interest.
Pay the total monthly amount of the higher-interest loan (the regular payment, plus the overage, plus the recurring sum) to repay the debt with the second-highest interest rate after you’ve paid off that first loan.
4. Sign up for automatic payments to avoid defaulting
Did you know that certain financial institutions give a reduction in interest if you pay your loans regularly?
Auto-pay may save you money on interest as well as help you avoid a late payment.
Your loan repayment will run on autopilot, so you won’t have to pay your bills manually each month.
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5. Locate and contact your loan servicer
You don’t want to be caught unaware of when your payments begin.
After reading the information on your student debts, double-check who your loan servicers are and what is included in your debts.
This is straightforward if you have federal student loans. Check your Federal Student Aid account to discover which of the nine student loan servicers has your loan.
Contact your private student loan lender for additional information about your student loan (whether it’s a bank, credit union, or online service provider).
Eventually, notify your servicer if you’re moving or changing your email address from a college account to a personal one.
You may also end up missing a payment because you didn’t get any notification about it.
6. Don’t default on your student loan in any way possible
If at all possible, avoid defaulting on your student loans.
Contact your loan servicer as soon as possible if you are having difficulties repaying your student debt.
If you find that you can’t make your regular payments, you may be able to postpone them for a time so that your debts do not become delinquent or go into default.
If you don’t pay your debt according to the plan you agreed on, it may negatively affect your credit score and lead to wage garnishment.
It might be difficult to pay off student loans, and ignoring them will not make the difficulty go away. It’s a good idea to deal with your debt proactively.
Although repaying your student loans might take time, following expert advice may help you come out on top and possibly pay off your student debts faster.
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7. Consider if it’s possible to pay off your debt while you’re in school
Because most student loans come with a grace period, you don’t have to pay them until after you’ve graduated.
However, if you can make small or interest-only payments as a student, you may save money on your loans.
If you use your part-time job or work-study program to earn money while you’re in school, you may save money on your student loan by reducing the interest.
You may also lower the impact of interest capitalization (i.e. having your loan balance increase as interest is accrued).
If you make a few modest payments each month, or at the very least when feasible, you may aid relieve the tension that will undoubtedly come upon you once you are required to begin repaying your student loans.
8. Leverage your repayment options if you’re facing difficulties
You’ll also need to figure out how much you’ll have to pay each month, as well as what kind of student loan repayment programs are available.
You have the option of taking out a federal student loan that comes with standard 10-year plans, income-driven plans, extended repayment options, and others.
Increased flexibility can be useful if your income is low and you need to decrease monthly payments.
Private student loans are not as flexible, but if you’re in debt or going back to school, certain lenders may allow you to delay or postpone payments.
Speak with your lender about what you can do if you wish to change monthly payments.
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9. Seek opportunities to get student loan forgiveness
Examine your sector for loan forgiveness programs to see if any are available.
For example, the Public Service Loan Forgiveness program may cancel your student loans after 10 years of employment in a nonprofit, public service company, or other qualifying workplaces.
Loan forgiveness or repayment assistance is also available for professions that deal directly with the public, such as teachers and nurses.
If you’re searching for a job, be sure to research any available student-loan forgiveness possibilities.
You may also seek employment that offers loan repayment options as part of the employee benefits package.
10. Make debt repayment your primary goal rather than the amount you owe
You might be shocked at how much money you’ll have to reimburse.
Anyone who is just starting his or her career and is still gaining an understanding of the world might be discouraged.
The debt snowball and debt avalanche are two popular repayment techniques for student loans.
You focus on closing out the loan with the higher debt first, which allows you to apply any remaining payments to that debt.
The fewer loans you have, the more motivated you’ll be to keep going.
The debt avalanche technique, as the name suggests, has you attack loans with the highest interest rate first.
As a result, it will save you more than any other approach if all other factors are taken into account.
However, you may or may not get the same boost if you’re slowly chipping away at a high-interest loan with a massive outstanding balance.
To find out which debt repayment approach works best for you, consider using both strategies at the same time.
Remember that making additional payments is necessary for achieving a quick debt reduction.
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11. Refinancing your student loans is a smart option
You might be able to refinance your student loans if you have a good credit score and enough money and meet the lender’s criteria.
You may restructure your student debt, modify the terms, and even get a lower interest rate by refinancing.
However, refinancing isn’t right for everyone, especially if you’re relying on federal aid.
When you refinance federally guaranteed loans, you lose access to a variety of government aid programs like income-driven repayment plans and Public Service Loan Forgiveness.
Before you apply for student loan refinancing, be aware of all the advantages and disadvantages.
“I’ve seen far too many borrowers take the initial opportunity to decrease their student loan interest rate without thoroughly thinking things through and considering the ramifications,” Caplan says.
Before taking out a loan through a private lender to refinance your federal loans, make sure you do a thorough study.
If you don’t require those federal services, refinancing may be a smart alternative to adjusting your monthly payments and saving money on interest.
12. If you are caught up, consolidating your loans might be an excellent solution
If you know something, you should consider whether your debts should be combined.
Consolidating your student debts can help you save money on interest charges by lowering the amount you owe.
The primary benefit of consolidation is that it typically reduces the cost of your monthly payments.
It also extends the period you to pay off your debt, which is a mixed blessing.
Keep in mind: Making a loan payment might extend the time it takes you to pay off your debt, but it also raises interest payments.
Before you commit to consolidation, make sure you understand all of the terms and conditions.
One aspect you should bear in mind: You lose your right to deferral and income-based repayment programs if you consolidate. We go through them in further detail below.
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Frequently Asked Questions
1. Knowing your loan is the first step.
2. Don’t borrow more than you need.
3. Pay your higher student loan in priority.
4. Sign up for automatic payments to avoid defaulting.
5. Locate and contact your loan servicer.
6. Don’t default on your student loan in any way possible.
7. Consider if it’s possible to pay off your debt while you’re in school.
8. Leverage your repayment options if you’re facing difficulties.
9. Seek opportunities to get student loan forgiveness.
10. Make debt repayment your primary goal rather than the amount you owe.
11. Refinancing your student loans is a smart option.
12. If you are caught up, consolidating your loans might be an excellent solution.
Student loans don’t go away after seven years. There is no program for loan forgiveness or cancellation after seven years
Marie got her journalism degree from the University of California and is an award-winning financial journalist, who’s responsible for collecting and analyzing information concerning students and young adults within the world of finance.
Marie has spent her career with more than 5 years writing for unique media outlets like Yahoo finance, GoBankingRates, and CNBC. She also teaches them how to plan strategically to get out of loan debts easily.
Her goal is to educate students about the different stages in life that involve finances so they can get their money’s worth.